El contexto normativo: diseño curricular de base

R. Edward Freeman (1984, 2010) defined the term ‘stakeholder theory’ as relating to groups upon which an organization’s existence depended. His work added a new strand of research and perspective to CSR and stakeholder theory became ‘central to CSR’ (Maon, Lindgreen and Swaen, 2009:72). CSR theories and concepts could be tested using his framework thereby facilitating a pragmatic approach to assessing the level of CSR engagement. Donaldson and Preston (1995) observed that stakeholder theory demonstrated that the firm represented a hub of connections comprising employees, suppliers, customers and

shareholders, as well as the communities affected by the firm. Following the turbulence of the 1980s, the 1990s resonated with the notion that CSR was going through a ‘dynamic evolution’ (Wartick and Cochran, 1985:759). The emphasis was placed firmly on outcomes and performance by Wood (1991), which moved

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the focus away from Jones’ 1980 model that concentrated on processes. Paradoxically, therefore, outcomes and performance were largely delegated to managers to deliver against objectives, in the same way that Jones had envisaged managing processes with responsibility delegated further down the command chain (Jones, 1980). Thus, as proposed by Jones (1980), actually delivering CSR as a concept, an ethos, a way of behaviour, was overshadowed in favour of CSR as a performance management strategy.

Another option was presented during this period when ‘corporate citizen’ (CC), became part of the lexicon of CSR. With a focus more on behaviours rather than outcomes, Matten and Crane (2005) noted that CSR appeared to be external and reactive, insofar as business was using CSR as part of its marketing strategy to build the brand among its customers. However, CC adopted a more internal and anticipatory focus, looking to the expectation of the state or states. This notion incorporated the view of the company as a citizen insofar as it displayed the

behaviours of what was expected of a citizen, i.e. to make a contribution to society as part of a social contract in which we support and nurture each other, do no harm, assist when in need, and receive help when struggling (Matten and Crane, 2005). A more general suggestion of a practical, micro-level nature

operationalisation of CSR was offered by Maclagan to engage stakeholders in a ‘participative process’ (Maclagan, 1999:43). Yet the overall focus tilted upwards looking to leadership, policies and a macro view of the world.

3.4.1 Stakeholder theory in question

Following Freeman’s first book on stakeholder theory in 1984, a considerable section of CSR scholarship was devoted to the evolution of the theory and ways were proposed to advance CSR using a stakeholder approach (Clarkson, et al, 1994; Freeman and Gilbert, 1992; Lerner and Fryxell, 1994). However,

stakeholder theory further complicated the search for a definition for CSR and added to increasing criticism from several quarters, including from two of its most strident detractors, Charles Blattberg (2013) and Elaine Sternberg (1997, 2009). Both considered that the problem with stakeholder theory was that it was ill- defined and allowed for the broadest interpretation so that anyone, even those

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with malicious intent, could force firms to be beholden to their demands, however unreasonable. Although Blattberg conceded that in theory engagement between stakeholders was possible by means of ‘conversation’ (2013:8) he expressed doubt that such a system would work. The shortcomings stem from a potential disparity of interests of stakeholders and ‘compromise’ needed to reach

agreement (Blattberg, 2013:12). Blattberg’s perspective begins by viewing the corporation as a benign entity. As such it should be regarded as a society of integrity within a wider society that has faith that the corporation will do what is best for all concerned. Rejecting even this limited acceptance of stakeholder theory, Sternberg’s view is that it would lead to a debasement of rights of

ownership and vitiates the capacity of business to create wealth (Sternberg, 1997, 2009). Furthermore a free society should operate by having an understanding that that which is not ‘expressly prohibited’ is allowed (Sternberg, 1997:7).

Sternberg perceives an insidious onslaught on the political rights and freedoms of people to engage in business enterprise (Sternberg, 1997). For Sternberg, social contract theory provides a solid argument against stakeholder theory. Because a social contract needs consent from all parties, if organizations are coerced into compliance, it negates any social contract (Sternberg, 1997).

Interestingly, social contract theory has been cited as a reason to engage with stakeholder and CSR theories because it underpins a fair and equitable society (Garriga and Mele, 2004). Emanating from philosophies classified by John Locke (1947) and John Stuart Mill (1865), Donaldson and Dunfee’s (1994) ‘integrative social contract theory’, brought the concept up-to-date. By combining classical social contract theory (Locke, 1947; Mill, 1865) with what could be described as one that was stakeholder centred, integrative social contract theory involved all those with an ‘implicit contract’ (1994:254). However, the practicalities of implementing an integrative social contract and an individual manager’s

responsibility in the process were not explained (Donaldson and Dunfee, 1994).

Taking an integrative social contract to a more proactive level to achieve an evolved CSR, was cited by Bowd, Bowd and Harris (2006) who suggested that organizations ought to address a commitment to a wider range of social and business issues. The proposal encompassed human rights, quality of goods and

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services, and the environment. Broadening the concept to this extent was noted by Scherer and Palazzo (2011). These authors identified an emerging role, wherein private companies become political players in a global context. In recent literature on the subject of CSR, corporate citizenship, the post-nation state, globalization, and the post financial crisis, this idea of global interconnections and ramifications has featured more fully (Herzig and Moon, 2013; Scherer, Palazzo and Matten, 2014). Scherer and Palazzo defined this as ‘political CSR’

(2011:899). In essence, political CSR is distinguished by a considerable broadening of the range of involvement in the process. For example, whereas under the instrumental approach governance is mainly the duty of the state, the political approach incorporates a range of actors that include ‘civil society, and corporations’ (Scherer and Palazzo, 2011:908). Similarly, legal aspects under the political approach, take the concept away from precision and formality when interpreting rules and regulations into the realms of a high degree of subsidiarity and devolvement with self-regulation at the heart of the process.

Recent scholarly work suggests that the influence of business in a global political context has thrown up important questions about the effect companies have on states, democracy and individual rights (Scherer, Palazzo and Matten, 2014). Along with universal attention to the political role of companies, business globalization raised awareness and concern of the impact of those whose lives had been affected by the exponential growth of world trade. Inherent in the

concern for global human rights, is the idea of a universal social contract (Scherer and Palazzo, 2011; Skair and Miller, 2010) to which, at the beginning of the 21st century, two global initiatives were linked. The first was formulated in the United Nations (UN) Global Compact, which was drawn up in 2000 and comprised principles that were based on UN declarations on human rights, rights at work, environment and sustainable development, commitments to anti-corruption

(www.unglobalcompact.org). Globally, a more businesses orientated undertaking was given in 2002 by the World Economic Forum with its ‘Global Corporate

Citizenship: the leadership challenge for CEOs and boards’. Over the following decade Klaus Schwab, CEO of the WEF, advanced the claim that it was moving to a position of alliances based ‘global values’ which would be driven by business corporations (www.weforum.org/corporate-citizen). Thus during the years of the

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new millennium, responsibility for CSR was placed in the offices of the heads of organizations and their immediate team. However, the emphasis expanded to collaboration and consideration of wider society, especially those represented by NGOs and environment and social justice campaigners (Aguilera, et al, 2007).

3.4.2 The business case for CSR

In contrast, at the micro-level and looking at a business return, McWilliams and Siegel (2001) proposed a model for profit maximisation linked to CSR activity. Using a cost-benefit analysis, the model gave managers a tool to assess the demand from customers of demonstrable CSR and the impact on costs of

satisfying that demand. This information placed companies in a position to make better informed decisions about the strategic adoption of CSR policies and

practices. McWilliams, Siegel and Wright’s (2006) approach, whilst also

acknowledging a business case to justify CSR, revisited the matter of a definition of CSR explaining that a lack of consensus obstructed an understanding of the concept. The result was that it restricted the adoption of CSR within business. In particular, McWilliams, et al (2006) suggested that the decision making process was obscured to the point where it was difficult to discern whether leadership had an effect on the adoption or otherwise of CSR into a company strategy. This aspect is of high relevance to CSR as a management issue and the responsibility of individual managers if it is to become MSR. If managers are to drive the

implementation of the concept in the same way that they took on equality issues, for example, they will need clarity about their obligations. The small amount of research carried out in this area is not encouraging. Fenwick and Bierema (2008) discovered that HR managers saw their involvement with CSR as almost an

entirely internal exercise, mostly geared to staff welfare. Later research by Costas and Karreman (2013) looked at CSR as a motivational and control tool. The authors suggested that organizations motivate workers by the company’s

engagement with CSR; the notion being that their contribution goes beyond their immediate work and into enhancing society (Costas and Karreman, 2013). This is an interesting manipulation of the extension of Follett’s exhortation that business management, and indeed all work, is the greatest contribution individuals can make to ‘serving your community’ (Follett, 1941:134). Measuring the benefits of this contribution is one of the difficulties presented to champions of CSR. For

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those businesses that have to justify their activities to shareholders, the ‘doing well by doing good’ argument may have to show an economic return (Christiansen, 2014; Falck and Heblich, 2007; Margolis and Walsh, 2003).

Addressing the task of return on investment for CSR, Hazlett, McAdam and

Murray (2007) proposed adopting quality management strategies to build CSR into ethical business practice, which implied transferring the implementation of CSR onto practicing managers. Haberberg, et al (2010) viewed CSR from an ‘idealistic moral dimension’ (2010:367) and mirrored the debate that business takes

responsibility for decisions based on ethics as well as economic factors (Davis, 1960, 1967; Frederick, 1960, 2000; Mele, 2012). Other scholars looked beyond outcomes and proposed that managers develop a common understanding of aspirational standards for CSR, but did not give practical advice on how to achieve this common understanding (Basu and Palazzo, 2008:133). Another factor noted by Haberbeg, et al (2010) was that economic gains of CSR were indiscernible. Complicating the issue further, by proclaiming itself to be socially responsible, an organization risked attracting the attention of the wider public and media and invited charges of cynical manipulation of CSR (Haberberg, et al, 2010). Although a lack of hard evidence as to its efficacy and benefits, advocates of CSR were of the opinion that it promoted higher ethical standards, which consolidated values that spread throughout business (Haberberg, et al 2010). Some of the views Haberberg, et al (2010) are compatible with those of Follett, insofar as

management as a profession adheres to codes of conduct that heighten business standards and social responsibility. Two ardent critics of the business case for CSR, Nijhof and Jeurissen (2010) called it into question the entire proposition claiming it could lead to the moral foundations of CSR being compromised and undermined. In this respect, safeguarding against manipulation of CSR for reasons of profitability would require something akin to Haberberg, et al’s (2010) proposal in relation to a standard of practice understood and accepted as a CSR norm. Apart from Maon, et al (2009), who devised a framework for an

organizational definition and standard for engaging with CSR, there is little

practical guidance for managers on implementation. Which leaves the conundrum of CSR; whereas a business case has been made in other management issues, with outcomes delegated to managers and often further downwards, the business

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case for CSR has not been tackled by management scholars in the same way. Overall CSR, regardless of the merits of the business case, continues to remain a policy decision for the executive.

With the formulation of the business case the debate on CSR was moved forward from the polarised positions of the monetarist Friedman (1962,1970) and the altruistic and moral perspective in which profits should be sacrificed (Jeurissen, 2000). Emerging from the centre of the debate was the continuing development of the idea of stakeholders, which was similar to Follett’s thoughts of individuals and groups ‘interweaving obligations’ (Follett, 1941:84) and sustaining each other. In relation to MSR, this new appraisal of CSR taking into account individuals making up a variety of groups began to move attention away from policy statements onto the implementation of CSR (Schilling, 2000). At the same time, the global and political implications of social responsibility and awareness became more prominent and the subject of a raft of related research (Scherer, Palazzo and Matten, 2009).

3.4.3 Democracy and political CSR

A thought provoking and prescient notion was posed by Scherer and Palazzo (2011) when they examined the evolution of CSR in relation to democratic foundations. The growing power and influence of corporations, particularly with the rise of globalization, led Scherer and Palazzo (2011) to look at the challenge to democracy and to call for what they described as ‘deliberative democracy’ (2011:907). Envisaging a model that took into account the politicization of corporations, Scherer and Palazzo (2011) assessed the subsequent changes in relationships and interactions between ‘state, economy, and civil society’

(2011:918). At the heart of this assumption is the notion presented by Habermas (2001) that, for democratic public life to thrive, individual members of society should be involved in debates and communication with institutions that have power and influence that affect them. Habermas’ ideas are identical to those of Follett (1941:145) in relation to democratic engagement and public debate; her expectations of mutual and shared dependency were also evident in Moon, Crane and Matten’s (2005) concept of deliberative democracy. These authors traced the

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concept from its roots in the assumption of the rights of citizens (Locke, 1947) to ‘developmental democracy’ (2005:441) and the adoption of policies by

corporations that were inclined to pro-active initiatives both with positive and negative impacts on society. Examples given to illustrate these impacts are the voluntary banning of GM foods by UK supermarkets during the 1990s (Kolk, 2000) which contrasted with corporate opposition to the UN-linked Kyoto protocol, which aimed to reduce greenhouse gas emissions, (www.kyotoprotocol.com). With ‘deliberative democracy’, Moon, et al (2005:442) outlined a model that focused on a problem solving strategy and calculated engagement with a view to finding solutions through active discourse. Moon, et al’s (2005) highlighting of the

essential voluntary nature of negotiations between stakeholders and corporations, evoke comparisons with Freeman’s stakeholder theory (2010). A fundamental element in both approaches is the need to seek out a new ‘principle of association’ (Follett, 1918:279). In this association, business aligns itself to partnerships with society and integrates interests by coordinating works for longer term sustainable prosperity (Follett, 1918, 1924, 1941, 1949; Kemper and Martin, 2010). As the aforementioned illustrates, much has been researched and written about business and society integrating interests; however, there are gaps in the literature

concerning the practicalities and methods for unifying interests for the long-term good. On the other hand, there have been strident voices calling for an end to any integration or unification and for market forces to be the main imperative to decide on any undertaking of CSR. The following section examines some of the

arguments advanced by those opposed to CSR.

3.4.4 CSR challenged

A principle complaint about CSR is that, according to the vague definitions, almost anything could be deemed to be CSR, which might include ‘bribing local officials’ (Sternberg, 2009:6). Presenting the antithesis of mainstream views in support of CSR (Carroll, 1979, 1991, 2012; Frederick, 1960, 1994; Freeman, 1984, 2010) retired banking CEO, John Allison (Allison, 2012; Parnell and Dent, 2009),

expressed opinions that concurred with those of Friedman (1962, 1970) and Levitt (1958) and are endorsed by Sternberg (2013). All begin with the assumption that laws and tenets of governance are sufficient to ensure that businesses behave within the rules. Any obligation to society is accomplished by fulfilling shareholder

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expectations to make as much money as possible (Friedman, 1970). By

defending and maintaining capitalism and pursuing a sustainable profit- centred model, Allison claims that the wealth created ultimately benefits all society (Allison, 2012; Parnell and Dent, 2009). With even more disquiet, Sternberg interprets the inherent obligation of CSR to mean there is an expectation that business takes on duties beyond its true purpose. By diverting from core activities, CSR makes firms uneconomic and, echoing Friedman (1970), undermines human rights (Sternberg, 2009; 2013). Also noting the importance of SMEs to economy, Sternberg

suggested that SMEs have little interest or involvement in CSR, which undermines the entire concept (Sternberg, 2009, 2013). Dickson (2010), however, cites

research that contradicted this view and moreover provided evidence of significant SME commitment to CSR. Regardless of any defence of CSR any notions that business should take a less passive approach and do more to engage with wider society are anathema to Allison and Sternberg (Allison, 2012; Sternberg, 2009, 2013). Overall, their objections are based on corporations not needing to subscribe to CSR because wealth creation satisfies their part of the bargain (Allison, 2012; Friedman, 1962, 1970; Parnell and Dent, 2009; Sternberg, 2009, 2013). This view did not recognise that there were risks to business from ignoring the development of social justice, human capital and human relations (Carroll, 2000; Davis, 1960; Handy, 2002; Schrempf, 2012; Windsor, 2013).

3.4.5 Shareholder value and CSR

The polarisation of views on CSR throws into focus the question about the purpose of a firm. In its narrowest sense, the firm is concerned with maximising value for the benefit of the owners, be they individuals or groups of shareholders (Allison, 2012; Friedman, 1962, 1970; Levitt, 1958; Parnell and Dent, 2009;

Sternberg, 1997, 2013). Handy (2002) adopts a broader interpretation and tackles the central theme of shareholder value. Handy describes the reality that

shareholder value can be manipulated to suit the objectives of the firm’s executives; therefore, it is not an accurate measure or predictor of long-term success. Here Handy concurred with Follett’s proposition that ‘the accumulation of responsibility’ means that business must take heed of an implicit morality that runs through the relationships that business has with its stakeholder

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in relation to the firm as a legal entity accountable through corporate governance (Allison, 2012; Friedman, 1970; Sternberg, 1997, 2013). Handy advances the fact that company laws were formulated during in the 19th _{century. This means that} the origins of laws governing company behaviour relate to entities hugely different to those of the 21st _{century. Of particular importance is the aspect of property and} ownership, which Friedman (1970) and Sternberg (2009) cite as a reason for